House passes tax bill, again and with fixes, sending final $1.5 trillion package to Trump

After months of debate, Congress has released a final tax reform bill. The bill eliminates some personal exemptions while increasing the standard deduction.
USA TODAY

House Speaker Paul Ryan of Wis., center, leaves the House Chamber after voting on the Republican tax bill. Republicans muscled the most sweeping rewrite of the nation's tax laws in more than three decades through the House.(Photo: Jacquelyn Martin, AP)

WASHINGTON — In an unusual do-over vote, the House on Wednesday passed a sweeping Republican tax overhaul for the second time in two days — giving final approval to the $1.5 trillion measure and sending it to President Trump for his signature.

It was an anti-climactic end to an otherwise triumphant win for the GOP, marking the party's first major legislative victory for the year and handing Trump a signature domestic achievement before the holidays. The House first passed the bill on Tuesday but had to vote again Wednesday after the Senate made several minor last-minute revisions — in a vote just after midnight — that were needed to comply with that chamber's strict budget rules.

Wednesday's re-vote in the House split mostly along party lines, 224-to-201, as it did 24 hours earlier. Twelve Republicans voted against the measure, along with all the chamber's Democrats.

"I promised the American people a big, beautiful tax cut for Christmas," Trump said in a statement after the House vote. "With final passage of this legislation, that is exactly what they are getting."

While Republicans touted the bill as a boon for the middle class and an economic engine for the economy, Democrats said it was a fiscally irresponsible giveaway to big corporations and the rich.

Rep. Kevin Brady, R-Texas, chairman of the House tax-writing committee, said the bill will deliver much-needed relief for families and businesses.

“We’re going to see the growth in jobs and paychecks like we haven’t seen in years,” he said. “Starting in the New Year, none of us have to accept this broken tax code and this slow growth … Things will change for the better and they will change immediately.”

House Democratic Leader Nancy Pelosi, D-Calif., blasted the GOP bill as a “massive con job” that betrays Trump’s promises during the 2016 campaign. It does not eliminate corporate loopholes, she said, or prevent companies from shipping jobs overseas. Instead it will balloon the national debt and pave the way for cuts to the social safety net.

“They’re putting this bill on a credit card that our children will have to pay for,” Pelosi said.

House and Senate Republicans planned to celebrate the bill’s final passage with Trump at the White House this afternoon.

The centerpiece of the GOP bill is a permanent 40% tax cut for corporations, a change Republicans say is long overdue and desperately needed to make America more competitive in the global economy. Smaller businesses will also see their tax burden shrink significantly.

Supporters said the cost of reducing tax collections by $1.5 trillion over the next 10 years would be offset by an explosion of economic growth, but economists said at best that growth will cover one-third of the cost. Non-partisan estimates project the tax bill could add $1 trillion to the national debt over 10 years. And laws designed to prevent deficit spending could kick in as early as next year, forcing cuts to popular programs, including Medicare.

The bill also lowers tax rates for individuals and families temporarily, while increasing the standard deduction and the child tax credit. But because the bill also kills or limits key tax deductions — most notably reducing the amount of state and local taxes that individuals can deduct on their federal tax returns — the impact on individuals will vary.

In a study released on Monday, the Tax Policy Center, a nonpartisan think tank often cited by Democrats, concluded that the top 1% of taxpayers, those making more than $732,800, would get 20.5% of all the benefits in the tax bill next year.

The study also found that for people in the middle of the national income scale — making between $48,600 and $86,100 — 91% will see a tax cut averaging $1,090, while 7% will see a tax increase averaging $910 next year.